Tuesday, October 9, 2007

Shorties piling on LULU

lululemon athletica is a Co that hasn't given reason for anyone to turn sour. The Co met expectations in its last earnings report, and the buildout over America is underway. But, like Crocs, we can trust that traders — for the most part, men — will always take offense to products they don't relate to. Crocs Caymans. lululemon yoga workout pants for women.

Since lululemon's apparel are geared to the women's market, it makes sense. The only problem is, the shorties are wrong. LULU will continue to grow in more ways than one.

Short interest in the U.S.-traded shares of the trendy workout retailer rose 34 percent from mid September.

The company, which made its market debut in late July, delivered a third quarter forecast last month that did not beat market expectations. The short interest increase comes on top of a 27 percent increase the company's shares saw from mid-August to mid-September.

About 3.4 million of the company's U.S. shares are held short, according to Nasdaq data.

Ain't it true?

What I had to do was to find stocks that would be hoisted up because they stirred people's imagination for the future. ... I was not interested in the company's individual products, whether it was metals for rockets, solid fuel, or advanced electronic equipment. In fact, I did not want to know what they made—that information might only inhibit me. I did not care what the company's products were, any more than I was influenced by the fact that the board chairman had a beautiful wife. But I did want to know whether the company belonged to a new vigorous infant industry and whether it be haved in the market according to my requirements.

This, of course, was directly against the advice of many financial writers with conservative backgrounds who have been pounding into investors for generations that they must study company reports and balance sheets, find out all they can about a stock's background, in order to make a wise investment. I decided that was not for me. All a company report and balance sheet can tell you is the past and the present. They cannot tell the future. And it was for this I had to project my plans.